The Week in Review 5/31/22

"Successful investing is about managing risk, not avoiding it." — Benjamin Graham

Good Morning ,

We hope everyone had a pleasant Memorial Day Weekend, and thank all the men and women who have, and are bravely serving our country… the land of the free, because of the brave! Thanks also to all of our “first responders” who serve at home!

We finally got a break in the selling… the S&P 500 broke a seven-week losing streak during last week, rallying 6.6% after hitting its lowest level since March 2021 last Friday.

The Nasdaq (+6.8%) outperformed slightly while the Dow (+6.2%) lagged a bit but was able to snap its longest weekly losing streak since 1932. Great gains across the board!!

The first two sessions of the week saw some volatility, but the market rallied strongly after the S&P 500 managed to stay above last week's low during Tuesday's trading.

All eleven sectors finished the week in positive territory with the consumer discretionary (+9.2%) sector leading the way after underperforming earlier this month. The sector narrowed its May loss to 5.6%, largely thanks to a bounce in retail stocks after concerns about inflation and strength of consumer spending sent many of these names to their lowest levels in over a year.

However, the past couple days saw renewed interest in retailers on hopes that the worst is in the past.

Mega cap names also did some of the heavy lifting with the likes of Apple, NVIDIA, and Tesla contributing to the rally during the second half of the week. The trio gained between 8.3% and 14.5%.

Last week's rebound in stocks that faced significant recent weakness masked another strong showing from the energy sector, which climbed 8.1%, extending its May advance to 16.9%. Crude oil, meanwhile, returned to its May high, climbing $4.72, or 4.3%, to $114.77/bbl for the week.

Treasuries recorded their third consecutive week of gains, drawing some strength from speculation that the Fed could pause its rate hikes in September. The 10-yr yield finished the week just a basis point above its 50-day moving average (2.73%).

It's a busy day of economic data this morning as we'll get Case Shiller Home Price Data at 9 AM along with the Chicago PMI at 9:45 and then Consumer Confidence at 10 AM (all times eastern).

Yesterday's announcement that Europe would ban imports of most Russian oil has crude trading up over 3% this morning leading to further concerns of potential inflationary pressures. China reported PMI figures for May overnight, and while both the Manufacturing and Services sectors remain in contraction, the magnitude of the weakness wasn't as bad as expected.

Have a great “holiday shortened” week!!

Michael D. Hilger, CEP^®
Managing Director

Senior Vice President, Wealth Management
5956 Sherry Lane, Suite 1900 / Dallas, TX 75225Private Line: 214-365-5579 / Cell: 214-202-2540Private Toll Free: 877-208-7474 / Fax 214-691-5588

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